Massive healthcare fraud schemes uncovered in United States

Sixty people charged over 350,000 illegal prescriptions for controlled substances and 32 million pills

According to the CDC, approximately 130 Americans die every day of an opioid overdose

“The opioid epidemic is the deadliest drug crisis in American history

CINCINNATI, Ohio - Thirty one doctors, 7 pharmacists, eight nurse practitioners, and seven other licensed medical professionals, are among 60 people indicted for illegally prescribing and distributing opioids and other dangerous narcotics, and for healthcare fraud schemes.

Over 350 thousand prescriptions for controlled substances and over 32 million pills have been identified in relation to their cases.

In addition, Department of Health and Human Services (HHS) announced on Wednesday that since June 2018, it has excluded over 2,000 individuals from participation in Medicare, Medicaid and all other Federal health care programs, which includes more than 650 providers excluded for conduct related to opioid diversion and abuse.

Since July 2017, DEA has issued 31 immediate suspension orders, 129 orders to show cause, and received 1,386 surrenders for cause nationwide for violations of the Controlled Substances Act.

According to the CDC, approximately 130 Americans die every day of an opioid overdose.

"The opioid epidemic is the deadliest drug crisis in American history, and Appalachia has suffered the consequences more than perhaps any other region," Attorney General William P. Barr said Wednesday. "But the Department of Justice is doing its part to help end this crisis. One of the Department's most promising new initiatives is the Criminal Division's Appalachian Regional Prescription Opioid Strike Force, which began its work in December. Just four months later, this team of federal agents and fourteen prosecutors has charged 60 defendants for alleged crimes related to millions of prescription opioids."

HHS Secretary Alex Azar added: "It is also vital that Americans struggling with addiction have access to treatment and that patients who need pain treatment do not see their care disrupted, which is why federal and local public health authorities have coordinated to ensure these needs are met in the wake of this enforcement operation."

In addition to the cases announced on Wednesday, Attorney General Barr and U.S. Attorney Thomas T. Cullen announced that the ARPO Strike Force will expand into the Western District of Virginia, making it the tenth ARPO Strike Force district. ARPO is a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section (HCF Unit), the U.S. Attorney’s Offices for ten federal districts in six states, as well as law enforcement partners at the FBI, HHS Office of the Inspector General (HHS-OIG) and U.S. Drug Enforcement Administration (DEA). In addition, the operation includes the participation of the Tennessee Bureau of Investigation, multiple State Medicaid Fraud Control Units, and other federal and state agencies. The mission of the ARPO Strike Force is to identify and investigate health care fraud schemes in the Appalachian region and surrounding areas, and to effectively and efficiently prosecute medical professionals and others involved in the illegal prescription and distribution of opioids.

The charges announced on Wednesday involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a priority for the Department.

"Today’s takedown demonstrates the FBI’s unwavering commitment to working alongside our Strike Force partners, including the HHS-OIG and DEA, to fight the opioid epidemic and related criminal activity in the Appalachian region," said FBI Executive Assistant Director Hess. "We will not stand by and allow the harmful and oftentimes deadly practice of over-prescribing highly addictive drugs to continue unchecked. The FBI will pursue medical personnel who misuse their positions of trust to blatantly disregard others’ very lives for their own financial gain."

"The opioid crisis has had a devastating impact in the Appalachian region," said Principal Deputy Inspector General Chiedi. "Addressing this public health issue and ensuring beneficiaries have continuity of care requires a collaborative approach with our federal, state, and local partners. Our commitment is resolute. We will continue working together to protect the health and well-being of all Americans and ending this terrible epidemic."

"Opioid misuse and abuse is an insidious epidemic, created in large part, by the over-prescribing of potent opioids nationwide, and unfortunately, Appalachia is at the center," said DEA Assistant Administrator Martin. "Today’s announcement sends a clear message that investigations involving diversion of prescription drugs have been, and continue to be, a priority for DEA."

"CMS CPI is proud to work very closely everyday with our law enforcement partners to stop the exploitation of vulnerable patients and misuse of taxpayer dollars," said Deputy Administrator and Director of Center for Program Integrity Alexander. "Nowhere is this collaboration more important than in our fight against the opioid crisis in America."

The ARPO Strike Force is made up of prosecutors and data analysts with the HCF Unit, prosecutors with the 10 U.S. Attorney’s Offices in the region, including the newly added Western District of Virginia, and special agents with the FBI, HHS-OIG and DEA. The ARPO Strike Force operates out of two hubs based in the Cincinnati, Ohio/Northern Kentucky and Nashville, Tennessee, areas, supporting the 10 districts that make up the ARPO Strike Force region. In addition, the APRO Strike Force works closely with other state and federal law enforcement agencies, including the Tennessee Bureau of Investigation, State Medicaid Fraud Control Units.

For the ARPO Strike force locations, in the Southern District of Ohio, six individuals, including two doctors and three registered pharmacists were charged with several counts, including unlawful distribution of controlled substances and conspiracy to obtain controlled substances by fraud. In one case, a doctor who is alleged to have been at one time the highest prescriber of controlled substances in the state, and several pharmacists are charged with operating an alleged "pill mill" in Dayton, Ohio. According to the indictment, between October 2015 and October 2017 alone, the pharmacy allegedly dispensed over 1.75 million pills. These cases were brought with assistance from the FBI, DEA, and HHS-OIG, as well as the Ohio Attorney General's Office, Medicaid Fraud Control Unit; the Ohio Bureau of Workers' Compensation Ohio; the Ohio Board of Pharmacy and the Ohio Medical Board.

In the Western District of Kentucky, a doctor was charged with controlled substance and health care fraud counts in connection with providing pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office, and for directing staff at the clinic, including individuals not licensed to practice medicine, to perform medical services on patients. In another case, a doctor, a Florida compounding pharmacy and its owner were charged in connection with a scheme that involved the payment of alleged kickbacks in return for writing prescriptions for compounded drugs that included controlled substances, and for fraudulently inflating the costs for prescriptions that were billed for reimbursement by Medicare and TRICARE. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Defense Criminal Investigative Service, as well as the Kentucky State Police, the Louisville Metropolitan Police Department, the Kentucky Office of Inspector General, the Kentucky Department of Insurance, and the Kentucky Medicaid Fraud Control Unit.

In the Eastern District of Kentucky, a total of five people were charged, including three doctors, a dentist and an office assistant who were charged in connection with several health care fraud and/or controlled substance schemes. In one case a doctor operating a clinic that focused on pain management allegedly provided pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office. In another case, a solo practitioner who operates a five-clinic family practice focusing on pain management allegedly billed Medicare for urine testing that was not done and for urine testing that was not medically necessary. A dentist was charged for alleged conduct that included writing prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice, removing teeth unnecessarily, scheduling unnecessary follow-up appointments, and billing inappropriately for services. In yet another case, a doctor was charged for allegedly prescribing opioids to Facebook friends who would come to his home to pick up prescriptions, and for signing prescriptions for other persons based on messenger requests to his office manager, who then allegedly delivered the signed prescriptions in exchange for cash. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Kentucky Medicaid Fraud Control Unit.

In the Middle District of Tennessee, federal indictments were unsealed on Wednesday charging nine Middle Tennessee medical professionals, including four doctors, four nurse practitioners and a pharmacist, with various charges alleging their participation in illegally prescribing and dispensing opioids and other dangerous narcotics and health care fraud schemes. Two cases involve doctors who were previously sanctioned by the Tennessee Medical Board in connection with the overprescribing of opioids, one of whom was sanctioned for providing prescriptions to vulnerable patients, while the other allegedly prescribed opioid pills after serving a Board imposed term of probation. Another case alleges that a doctor prescribed opioids and other controlled substances to at least four individuals. In another case, an advanced practice registered nurse at a pain management clinic allegedly wrote prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice. Separately, a pharmacist was charged for allegedly dispensing large amounts of opioids outside the usual scope of professional practice and for no legitimate medical purpose. Finally, a podiatrist was charged with unlawful distribution of controlled substances. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit; the 18th Judicial District Drug Task Force; the Sumner County District Attorney’s Office; and the District Attorney General for the 22nd Judicial District.

In the Eastern District of Tennessee, at total of eight individuals, including five doctors, a nurse practitioner, a physician’s assistant, and an office manager were charged in four cases. Four doctors, a nurse practitioner and a physician’s assistant were charged with the unlawful distribution of opioids. Two doctors were charged with health care fraud violations. Three of these cases are related to alleged pill mill operations in the Eastern District of Tennessee. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit.

In the Western District of Tennessee, 15 individuals were charged, involving eight doctors and several other medical professionals. In one case, a nurse practitioner who branded himself the "Rock Doc," allegedly prescribed powerful and dangerous combinations of opioids and benzodiazepines, sometimes in exchange for sexual favors; over approximately three years, the doctor allegedly prescribed approximately 500,000 hydrocodone pills, 300,000 oxycodone pills, 1,500 fentanyl patches, and more than 600,000 benzodiazepine pills. In another case, a nurse practitioner charged with conspiracy to unlawfully distribute controlled substances allegedly prescribed over 500,000 Hydrocodone pills, approximately 300,000 Oxycodone pills, and approximately 300,000 benzodiazepine pills (mostly Alprazolam), along with a myriad of other controlled substances. In another case, a physician charged with controlled substances and health care fraud violations allegedly prescribed approximately 300,000 hydrocodone pills, 200,000 oxycodone pills, 2,500 fentanyl patches, and 180,000 benzodiazepine pills, and prescribed medically unnecessary durable medical equipment that was billed to Medicare. Another doctor charged with controlled substances violations allegedly prescribed approximately 4.2 million opioid pills, sometimes in dangerous combinations with other drugs, such as benzodiazepines, and prescribed opioids to known addicts. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit, the Tennessee Office of Inspector General, and the West Tennessee Drug Task Force (28th District).

In the Northern District of Alabama, multiple individuals were charged in five cases, including four doctors. In one case, the owners and operators of a medical clinic and dispensary were charged with the unlawful distribution of controlled substances and health care fraud. In that case, a doctor allegedly prescribed opioids in high dosages, dangerous combinations, and in many cases, after having knowledge that patients failed drug screens and were addicts, preferring cash payments and charging a "concierge fee" that ranged from approximately $50 per visit or $600 per year. In another case, a doctor allegedly recruited prostitutes and other young women with whom he had sexual relationships to become patients at his clinic, while simultaneously allowing them and their associates to abuse illicit drugs at his house. In yet another case, a doctor allegedly dispensed controlled substances and other prescription drugs directly from the clinic, and prescribed excessive quantities of controlled substances to the same patients several times per month resulting in as many as 15 pills per day for some patients. In that case, the doctor also signed blank prescription forms to be completed by her staff when she was not at the clinic.

In addition to assistance provided by the FBI, DEA, HHS-OIG, the Defense Criminal Investigative Service and the Food and Drug Administration, Office of Criminal Investigations, these cases were brought in connection with assistance from the Hoover Police Department, the Huntsville Police Department, the Huntsville Area HIDTA Drug Task Force Strategic Counter Drug Team, the Marshall County Drug Task Force, the Alabama Medicaid Fraud Control Unit, and the Madison County Sheriff’s Office.

In the Northern District of West Virginia, a case was brought against an orthopedic surgeon who allegedly used fraudulent prescriptions to obtain tablets of acetaminophen-codeine for his own use. To obtain the pills, the surgeon allegedly wrote out prescriptions using his DEA number, and in the names of a relative even though the pills were for his own use, using a driver’s license that he had stolen from a colleague to obtain the pills from pharmacy. This case was brought in connection with assistance from the DEA and HHS-OIG.

In the Southern District of West Virginia, a doctor was charged with allegedly distributing narcotics, including dextroamphetamine, methylphenidate, and amphetamine salt, to a patient who did not have a medical need for the drugs and whom the doctor never examined. This case was brought in connection with assistance from the DEA and HHS-OIG.

In addition to the ARPO Strike Force districts, Wednesday’s enforcement actions include cases brought in the Eastern District of Pennsylvania and the Eastern District of Louisiana.

In the Eastern District of Louisiana, a neurologist at an alleged pill mill was charged with conspiracy to dispense controlled substances and conspiracy to commit health care fraud. The defendant allegedly pre-signed prescriptions for controlled substances, including oxycodone, for patients whom he did not personally examine to determine medical necessity for the prescriptions, and pre-signed prescriptions for controlled substances while he was travelling internationally. The defendant allegedly knew that certain of these patients used their Medicare Part D and Medicaid benefits to pay for the medically unnecessary prescriptions. In addition to assistance provided by the FBI, DEA, HHS-OIG, these cases were brought in connection with assistance from the U.S. Departments of Veterans Affairs – Office of Investigations.

In the Eastern District of Pennsylvania, a former licensed practical nurse allegedly filled fraudulent prescriptions for oxycodone in her name and in the names of others at a local pharmacy in order to obtain the pills for herself and to distribute to others. In addition to assistance provided by the FBI, DEA, HHS-OIG, the Office of Personnel Management, the U.S. Marshalls Service, these cases were brought in connection with assistance from the Caln Township Police.

Attorney General Barr and Secretary Azar were joined in the announcement by Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky; U.S. Attorney Russell M. Coleman for the Western District of Kentucky; U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio; U.S. Attorney William J. Powell for the Northern District of West Virginia; U.S. Attorney Michael B. Stuart for the Southern District of West Virginia; U.S. Attorney J. Douglas Overbey for the Eastern District of Tennessee; U.S. Attorney Don Cochran for the Middle District of Tennessee; U.S. Attorney D. Michael Dunavant for the Western District of Tennessee; U.S. Attorney Jay E. Town for the Northern District of Alabama; U.S. Attorney Thomas T. Cullen for the Western District of Virginia; Executive Assistant Director Amy Hess of the FBI’s Criminal, Cyber, Response, and Services Branch; Deputy Inspector General for Investigations Gary L. Cantrell of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Administrator John J. Martin of the DEA Diversion Control Division, and Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity (CPI) Alec Alexander.

Pictured: FBI Executive Assistant Director Amy Hess and other agency officials at a press conference in Cincinnati where charges were announced against 60 defendants as a result of a takedown by the Appalachian Regional Prescription Opioid (ARPO) Strike Force.